Don’t leave company directors high and dry, FMB warns Chancellor
More support is needed for those running small businesses who fall between the gap in schemes to support employees and the self-employed, the Federation of Master Builders (FMB) has stated in a letter to Chancellor Rishi Sunak (pictured).
A survey of 589 FMB members, which comprise of small and medium sized builder companies, found that four in five (80%) were directors of limited companies, with more than half (58%) receiving most of their income through dividends.
Two-thirds of directors (69%) said that 80% of their monthly PAYE salary (available as a furloughed employee through the Coronavirus Job Retention Scheme) would not provide enough support to them during the lockdown..
Of that group 63% work in the domestic renovation, repair and maintenance sector, the part of the construction industry least able to continue to work in line with public health advice, and therefore hardest hit by the virus.
Brian Berry, chief executive of the Federation of Master Builders (FMB), said: “The Chancellor has been generous in his support for workers and the self-employed in this time of crisis, but there is a core group who will miss out – those two million people who run and manage businesses and pay themselves through dividends.
“The vast majority of small builders have seen pretty much all their work dry up over the last few weeks, and naturally those running these companies are anxious to know how they will support themselves, their workers, and keep their businesses solvent in the weeks and months ahead.
“The support for the PAYE part of their income will not be enough for two thirds of builders to live off. Our members are being rejected for loans, and don’t have access to government cash grants that would go a long way to saving them from being left high and dry.
“We are joining the call with other industry bodies for the Chancellor to reconsider his decision not to cover dividend payments in his income support packages. This could be the lifeline that keeps many small businesses, employing thousands of people, afloat.”